Section 54 relief limited to living persons, excluding Hindu undivided families from deduction.

The term "assessee" in section 54 of the Income-tax Act, 1961 is construed in context to mean a living person and not a fictional or artificial juridical person. On that interpretation, a Hindu undivided family does not qualify for the section 54 deduction, because the statutory benefit is confined to persons within that meaning and excludes HUFs and other artificial entities.

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Issues: Whether a Hindu undivided family is entitled to deduction under section 54 of the Income-tax Act, 1961, where the term "assessee" is used in that provision.

Analysis: The reference was decided by following the earlier binding interpretation that the expression "assessee" in section 54, construed in context, refers to living persons and not to fictional or artificial juridical persons. On that construction, the benefit of section 54 is not available to a Hindu undivided family.

Conclusion: The question was answered in the affirmative and against the assessee; a Hindu undivided family is not entitled to deduction under section 54.

Ratio Decidendi: The word "assessee" in section 54 of the Income-tax Act, 1961, when read in context, denotes only a living person and excludes a Hindu undivided family or other artificial juridical person.

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